Bank of Ireland was founded in 1783 and the former premises of the defunct Irish Parliament at College Green, Dublin, were purchased for £40,000 in 1803.

Bank of Ireland today announced that over 94.6% of shareholders have taken up its offer to buy new shares at a discounted price.

Existing shareholders were given the option of buying three shares at 55 cent for every two shares they already owned as part of a recapitalisation of €3.4bn agreed with the the Financial Regulator.

The bank said following the closing of the Rights Issue offer period on 8 June 2010, it received valid acceptances in respect of 2,967,865,911 units of new Ordinary Stock (including units of new Ordinary Stock to be issued pursuant to the NPRFC  -- National Pensions Fund - -  Rights Issue Undertaking) representing approximately 94.63 per cent of the 3,136,446,463 units of new Ordinary Stock to be offered to Qualifying Stockholders and the NPRFC pursuant to the Rights Issue announced by the Bank on 26 April 2010.

Goodbody's Eamonn Hughes commented today: "The bank’s underwriters will now, presumably, place the rights issue rump (estimated at only c€90m) probably this morning, but it must be completed by close of business on Friday. Trading in fully paid rights ends at 5pm on Friday (11th) and dealing in the rights issue stock commences Monday (14th).

The Irish banks aren’t cheap on earnings based valuations, with BOI trading on 4.3x 2014f earnings but the sector on 6.1x 2012f earnings. However, with normalised earnings unlikely until 2014, TNAV is our preferred valuation methodology for the restructuring Irish banks. BOI is trading on 0.65x P/TNAV. This puts it at a 27% discount to UK restructuring (average 0.89x, with Lloyds on 0.93x and RBS on 0.84x) and a 29% discount to its European peers (on 0.92x). We note that RBS and Lloyds (twice) ramped up towards the close of their rights issue periods before rolling over in the subsequent few days as the markets digested the rights issue rumps.

It is possible that a similar dynamic may also befall BOI, which may see its discount widen to the sector again in the short term. For instance, the discount to the sector on the two Lloyds rights issues post the rights issue widened by 10-15 percentage points in the subsequent few days. However, in the medium term, we are of the view that BOI can trade up to its TNAV (€1.17). However, this will require the peers to be above that level, given that the Irish banks warrant discounts to reflect margins troughing later than peers (H210 vs UK in H109), lower capital levels (7% trough vs most of the sector on 8-12% range), weaker funding metrics and arrears still ticking upwards."